Which SBA Loan Program is Right for You?

Determining which type of SBA loan is best for your business can be confusing. Following is a synopsis of the different loan programs backed by the Small Business Administration.

The programs include:

7(a) Loan GuarantyThe 7(a) Loan Guaranty Program is one of the SBA's primary lending programs. It provides loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA (which has no funds for direct lending or grants).

Specialized 7(a): LowDocDesigned to increase the availability of funds under $150,000 and streamline/expedite the loan review process.

SBA ExpressDesigned to increase the capital available to businesses seeking loans up to $250,000.

CAPLinesAn umbrella program to help small businesses meet their short-term and cyclical working capital needs with five separate programs.

Specialized 7(a): International TradeIf your business is preparing to engage or is already engaged in international trade, or is adversely affected by competition from imports, the International Trade Loan Program is designed for you.

Export Working CapitalDesigned to provide short-term working capital to exporters in a combined effort of the SBA and the Export-Import Bank.

Pollution ControlDesigned to provide loan guarantees to eligible small business for the financing of the planning, design, or installation of a pollution control facility.

Specialized 7(a): DELTADefense Loan and Technical Assistance is a joint SBA and Department of Defense effort to provide financial and technical assistance to small firms adversely affected by cutbacks in defense.

Veteran's Loans and Disabled Assistance The SBA has not been providided funds for direct aid to veterans or the disabled. However both groups are eligible for all SBA loan guaranty programs, and may recieve special consideration.

Microloan ProgramThis program works through intermediaries to provide small loans of as little as $100 up to $35,000.

Certified Development Company (504 Loan) ProgramThis program, commonly referred to as the 504 program, makes long term loans available for purchasing land, buildings, machinery and equipment, and for building, modernizing or renovating existing facilities and sites.

The Angel Capital Electronic Network

The SBA also offers a program called The Angel Capital Electronic Network (ACE-Net). ACE-Net is a nationwide Internet-based listing service that provides information to angel investors (individual investors who are generally hands-off and have investments in many different startups) on small, dynamic, growing businesses seeking $250,000 to $5 million in equity financing. ACE-Net, sponsored by the Office of Advocacy of the U.S. Small Business Administration, was announced by President Clinton in October 1996. It is a major effort by the Office of Advocacy to systematize, and expand, on a nationwide basis, information available to investors on firms seeking equity financing. ACE-Net is run as a private, independent, not-for-profit organization.

The SBA offers many other excellent financing, startup and consulting resources to entrepreneurs and small business owners. The best way to take advantage of these resources is to schedule a meeting at a branch in your area.

Things to think about

What resources does the SBA offer that can benefit your business?

Where is the closest SBA branch office?

You may also like...

Comments Policy

Vault.com encourages you to express your opinions and engage in discussions with one another by leaving comments on our site. While we promote an open forum, please follow these guidelines to ensure an enjoyable and welcoming environment for all our readers. Vault.com does not review or moderate all comments but we reserve the right to remove or edit content once posted.

Respect one another. Debates are great, but attacks are not. Please refrain from posting offensive, obscene, threatening or abusive comments. If you personally attack other readers or writers, your comment(s) and responses to those comments may be removed from the discussion. Attacks create a hostile environment that discourages discussion. You are fully responsible for libelous or defamatory comments.

Hate-speech will not be tolerated. Comments containing racism, homophobia, sexism, or any other form of hate-speech have no place on our site.

Keep your language in check. Vulgar posts may offend other readers. Our filters are fairly tolerant, allowing for quite a bit of colorful/questionable language, but too many obscenities may prevent a comment from posting. In addition, in some cases, if a post is still too vulgar, a moderator may later remove or edit it.

Please note that comments may be edited by the moderator for any reason, including but not limited to language.

Stay on topic. Comments should be related to the topic discussed in the associated article or blog post. In order to keep the conversation relevant, off-topic comments may be edited or removed.

Don't impersonate someone else. You may not use a false e-mail address, impersonate any person or entity, or otherwise mislead as to the origin of your comments. If we believe you've impersonated someone else, we reserve the right to remove the comment.

Spam and commercial content will be removed. We do not welcome comments containing copy used for commercial purposes or for soliciting funds. If we see them, we reserve the right to remove them.

Readers may "report" concerns about other reader comments. Please use the "Report Abuse" link to flag inappropriate content. If a reader reports a concern, moderators will try to review that concern as soon as possible. This may take a few days although we hope to review comments more quickly. We do not remove every comment that has been reported and we cannot respond individually to every report.

Stop and think before you comment. We won't remove comments because a reader or writer regrets a post. Please remember that these comments are searchable and a comment history has a long life on the web.

Don't include personal information in your comments. We strongly discourage readers from posting personal information about themselves (ex. address, telephone number, workplace) and reserve the right to remove any comments we find with personal information about other people or that violates a third party's right to privacy.

Complaints about removed comments. We reserve the right to remove comments left to protest a removed comment. Please contact us if you have any complaints about deleted comments.

Repeated abuse of our guidelines may lead to commenting privileges being suspended. If you think you've been banned by mistake, let us know.

For further questions and comments regarding commenting on Vault.com, please contact us.

Get tips on interviewing, networking, resumes, and more directly to your inbox.